SBI signs MoU with Insurance Australia Group

State Bank of India is pleased to announce that it has entered into a Memorandum of Understanding with Insurance Australia Group (IAG) of Australia for its proposed expansion into the General Insurance Business.

Both- SBI and IAG will now jointly work towards finalizing a Shareholders' Agreement and immediately thereafter approach regulatory authorities for their necessary approvals. SBI hopes to commence business in the current financial year and aspires to be amongst the top 3 players in the General Insurance space in a period of about ten years.

SBI is the leader in the Indian banking sector, with over 100 million customers and 10,000+ branches across the country, one of the most trusted brands in India, and a heritage dating back over 200 years. "Establishing a general insurance joint venture is a key element of SBI's strategy to pursue emerging, high growth opportunities to build on our position as the pre-eminent financial services group in India," Dy. Managing Director (CS & NB) Mr. Chawla said.

"IAG's proven capabilities in technical and underwriting expertise, pricing and risk management, and its track-record in working successfully with other partners in the Asian region, make IAG an ideal partner.  We look forward to working together to grow a successful general insurance business."  He added.

IAG is an international general insurance group, with operations in Australia, New Zealand, Thailand, Malaysia, China, Singapore and UK through various brands. Its current businesses underwrite more than Australian Dollars 7.5 billion of premium per annum. It employs more than 16,000 people of which around 11,000 are in Australia. It sells insurance under many leading brands including NRMA Insurance, CGU, SGIO, SGIC and Swann (Australia); NZI and State (NZ); Equity Red Star and Hastings Direct (UK); and NZI and Safety (Thailand). It has a good presence in major segments of the GI market viz, auto insurance, property and casualty and commercial business.  It has experience in all channels of distribution including 'bancassurance' channel. One of its key strengths is that the Company is only in General Insurance.

Equity participation is proposed at 74:26 between SBI and IAG subject to the approval of RBI. 

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